South Africa’s grey-listing in 2023 by the Financial Action Task Force (FATF) caused both frustration and angst. Frustration because swifter governmental action could have avoided grey-listing in the first place; angst because of:
- the extra paperwork resulting from being grey-listed, plus
- the uncertainty about when/if we would ever succeed in getting off that list.
Fast forward to October 2025 (and January 2026)
South Africa’s recent removal from both the FATF grey list and the European Union’s High-risk Third Countries Jurisdictions list has distinctly improved our country’s financial reputation and economic prospects. For you as an investor, these developments carry positive implications for international access, capital flows, confidence, and long-term planning.
How did we get off the lists?
Simply put, we strengthened our financial controls. Tighter anti-money-laundering (AML) and counter-terrorism-financing (CTF) controls, specifically, were the main reasons for taking South Africa off the FATF grey list and EU high-risk list.
Four upsides to South Africa being removed from the “undesirables” lists
- Reduced compliance costs; smoother international transactions
The immediate benefit is the removal of enhanced due diligence obligations. EU financial institutions need no longer legally apply additional scrutiny to transactions related to South Africa, although each country may still follow its own risk policy. Expect faster processing of investment transfers and account openings and fewer delays in cross-border financial flows. - Improved investor confidence and macro-economic credibility
Both FATF and the EU have acknowledged the depth and effectiveness of South Africa’s reforms. FATF confirmed that we have implemented all 22 action items listed in its remediation plan. This sends a powerful message that South Africa’s financial governance systems have strengthened meaningfully.This will not instantly transform growth outcomes but it is a foundation for competitiveness, lowering the cost of doing business with SA and supporting a more stable financial environment. This improves investor sentiment – which could transform into:- increased appetite for partnerships
- reductions in the cost of capital
- less hesitancy in long-term commitments to South African markets
These are all necessary ingredients for long-term economic recovery.
- Strengthened institutions and long-term systemic benefits
Much of the work undertaken to exit the grey list involved not just legislative change but deep institutional strengthening, namely:- improved beneficial ownership transparency
- enhanced reporting obligations
- aggressive remediation of high-risk sectors
- stronger supervisory oversight across law enforcement and financial regulators
These improvements are not cosmetic; they form part of a durable financial governance system that reduces opportunities for corruption, money laundering and illicit flows.
The National Treasury department emphasised that South Africa’s exit “represents a major policy and institutional achievement” and reinforces the country’s trajectory toward a more resilient financial system.
- A more competitive environment for trade and capital flows
By lowering compliance burdens:- exporters benefit from less friction in cross-border payments,
- investors experience smoother processes when accessing global markets, and
- South African businesses become more attractive to foreign partners.
What difference does all this make to YOU, the investor?
As a Netto Invest client, your investment portfolio is already globally diversified, which protects you against local risk while allowing you to benefit from international growth.
The regulatory improvements that allowed us to be removed from the grey list:
- strengthening the financial environment in which you live
- increasing global confidence in South Africa
- reducing administrative barriers when investing offshore
While being removed from the FATF grey list and EU High-risk Third Countries Jurisdictions list does not signal the end of South Africa’s financial and economic challenges, it does confirm real, measurable progress.
Ryan Winter, CFP®
Wealth Manager
